IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 18TH DAY OF FEBRUARY, 2019 BEFORE THE HON’BLE Mr. JUSTICE JOHN MICHAEL CUNHA Crl.P. No. 6618/2016 BETWEEN :
M/s. SLV Engineering A proprietary concern Rep. by its Proprietor Sri. K. Devaraj Near Vinayaka Tent No. 3 Garudachar Palya White Field Road Bangalore – 560 048. … PETITIONER (By Sri. Rajesh D.M., Adv.) AND :
Sri. Saad Anees S/o. Anees Ur Rehaman Age major Director M/s. Fresco Food Pvt Ltd., Old No. 18/1 New No. 110/1 Albert Street Museum Road Richmond Town Bengaluru – 560 025. … RESPONDENT (By Sri. A.S. Kulkarni, Adv.) ---
This Crl.P. is filed under Section 482 Cr.P.C. with a prayer to set aside the order dated 13.07.2016 passed by the IV Addl. City and S.J., Mayo Hall Unit, Bangalore in Crl.R.P. No. 25017/2016 and etc.
This Crl.P. coming on for Admission this day, the Court passed the following;
O R D E R Petitioner herein filed a complaint before the trial Court under Section 138 of the Negotiable Instruments Act seeking prosecution of accused Nos.1 to 3 for dishonour of two cheques amounting to Rs.10.00 lakhs.
2. Accused No. 1 is the company, accused No. 2 is the Managing Director of the said company and accused No. 3 was sought to be prosecuted in his capacity as the Director of the said company.
3. On receipt of summons accused No. 3 (respondent herein) sought his discharge by making an application under Section 239 Cr.P.C. Said application was rejected by the trial Court. The respondent carried the matter in revision before the Sessions Court and by the impugned order dated 13.07.2016 in Crl.R.P. No. 25017/2016 learned IV Additional City Civil and Sessions Judge, Mayo Hall Unit, Bengaluru, allowed the revision petition and consequently discharged the respondent of the charges under Section 138 and 142 of the N.I. Act.
4. Learned counsel for the petitioner submits that the revisional Court has committed an error by misreading the judgment of the Hon’ble Supreme Court in the case of K.P.G. Nair Vs. Jindal Menthol India Ltd., reported in (2001) 10 SCC 218. In the said decision it has been held that even a Director who is incharge of the affairs of the company is equally responsible for the offences committed by the Company and hence, the impugned order is liable to be interfered with by this Court in exercise of jurisdiction under Section 482 Cr.P.C.
5. Learned counsel for the respondent however has argued in support of the impugned order and by referring to the provisions of Section 141 would contend that in the absence of any specific averment to the effect that the affairs of accused No. 1 company were managed by the respondent, the revisional Court was justified in discharging the respondent from the above offence.
6. On considering the rival submissions and going through the impugned order I do not find any illegality or infirmity in the impugned order warranting interference by this Court under Section 482 Cr.P.C. In the complaint it was stated that accused No. 1 was a company incorporated under the provisions of Companies Act, accused No. 2 was its Managing Director and accused No. 3 was the Director of the said company. Merely because accused No. 3 was one of the directors of the accused No. 1 company, it cannot be presumed that he was in-charge of and responsible for the conduct of business of company especially when accused No. 2 was also prosecuted in his capacity as the Managing Director of the said company. In this regard, it may be beneficial to refer to the ratio laid down in Standard Chartered Bank Vs. State of Maharashtra and others (2016) 6 SCC 62 wherein it is held as under:
“27. The position under Section 141 of the Act can be summarized thus:
(i) If the accused is the Managing Director or a Joint Managing Director, it is not necessary to make an averment in the complaint that he is in charge of, and is responsible to the company, for the conduct of the business of the company. It is sufficient if an averment is made that the accused was the Managing Director or Joint Managing Director at the relevant time. This is because the prefix “Managing” to the word “Director” makes it clear that they were in charge of and are responsible to the company, for the conduct of the business of the company.
(ii) In the case of a Director or an officer of the company who signed the cheque on behalf of the company, there is no need to make a specific averment that he was in charge of and was responsible to the company, for the conduct of the business of the company or make any specific allegation about consent, connivance or negligence. The very fact that the dishonoured cheque was signed by him on behalf of the company, would give rise to responsibility under sub-section (2) of Section 141.
(iii) In the case of a Director, Secretary or Manager [as defined in Section 2(24) of the Companies Act] or a person referred to in clauses (e) and (f) of Section 5 of the Companies Act, an averment in the complaint that he was in charge of, and was responsible to the company, for the conduct of the business of the company is necessary to bring the case under Section 141(1) of the Act. No further averment would be necessary in the complaint, though some particulars will be desirable. They can also be made liable under Section 141(2) by making necessary averments relating to consent and connivance or negligence, in the complaint, to bring the matter under that sub- section.
(iv) Other officers of a company cannot be made liable under sub-section (1) of Section 141. Other officers of a company can be made liable only under sub-section (2) of Section 141, by averring in the complaint their position and duties in the company and their role in regard to the issue and dishonour of the cheque, disclosing consent, connivance or negligence.”
7. In view of the above prosecution of the petitioner for the above offences cannot be sustained. The Revisional Court was therefore justified in discharging the petitioner of the above offences. Hence, I do not find any justifiable reason to interfere with the impugned order. Consequently, the petition is dismissed.
Sd/- JUDGE.
LRS.